Thieves: you don’t need to steal more than a billion!
By MUNGAI KIHANYA
The Sunday Nation
Nairobi,
07 July 2019
When Samuel Abisai
won a Sh211 million jackpot in 2017, a debate ensued as to whether he
can consume all that money within his lifetime. Of course, the answer
depends on how much he can spend on a regular basis; that is, daily,
weekly, monthly, annually.
At the time, I was
drawn into a discussion where a daily expenditure of Sh10,000 was put
forward and it turned out that at this rate, the Sh210 million would
never ever get exhausted!
Perhaps inspired by
Abisai’s story, Joseph Maingi wrote in to ask how long it would take to
consume one billion shillings. Maingi writes: “I am puzzled by the
billions of shillings that are being stolen from the government and was
wondering whether anyone needs all that money. How long can a billion
last?”
If this money is
acquired illegally, there is a good chance that it won’t be sitting in a
bank account. It will be under the mattress – so to speak! With the
currency note changes announced recently, you would have just 78 days
from now to spend the whole lot.
In other words, you
must spend an average of Sh12.82 million each day before 1st
of October 2019. Now is that feasible? Well; it depends on what you are
buying.
There are many houses
in the market going for that much so you could invest in these.
Unfortunately, such a massive investment spree will surely raise
eye-brows at the ministry of lands and at Kenya Revenue Authority (KRA)
as you transfer the houses to your name…
If you manage to buy
them quietly, you will obviously not live in 78 houses! You will end up
renting them out – perhaps at a “throw away” price of Sh30,000 per month
(NB the current market rate for such houses is close to Sh60,000
monthly). This brings in a total of about Sh2.3 million per month….
If the money was
acquired through genuine means, then there will be no problem in keeping
it in the normal banking system. Now, my bank will pay you 6.75 per cent
interest per annum, straight up, without any negotiation for any amount
above Sh100M deposited for one month.
After taxes, this
comes down to 5.74 per cent per annum, thus each month, you can expect
the one billion shillings to earn about Sh4.78 million. Now I know a
secure place where you can get a lot more that – Sh6.5M – but that’s a
different story.
The question then is:
can you consume the earnings (Sh2.3M from houses or Sh4.78 in bank
interest) each and every month?
If your answer is
yes; then there is a small chance that the one billion shillings can be exhausted; but
not within your lifetime! Otherwise, it will never ever get finished. In
fact, it will continue increasing. That’s a good thing because it
protects you from inflation.
So, Maingi’s question
is deeper than it sounds: if you can’t consume a billion shillings
within a lifetime, what’s the point of stealing more than that?
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